State government and its employee unions started contract talks over health insurance last week, and a union official says their early negotiation postures are miles apart.

Gov. Chris Gregoire’s office wants employees to pay a larger share of their health care costs, said Greg Devereux, executive director of the Washington Federation of State Employees.

Workers now pay 12 percent of insurance premiums, and unions offered up a proposal that would keep that ratio intact, said Tim Welch, the federation’s spokesman. But the state told employees they would have to pay a larger share of premiums – 25 percent – if they want to avoid higher costs at the doctor’s office, Welch said.

The federation said increasing employees’ average share of premiums to 25 percent is a nonstarter and the Democratic governor just wants to satisfy her critics who say state employees haven’t given up enough in the budget crisis.

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Gregoire and her budget office wouldn’t comment on negotiations, but the governor said everything is on the table, including increasing employees’ share of premiums and canceling scheduled “step” or longevity-pay increases.

Employees who received step increases this year saw their pay increase by as much as 5 percent, even as lawmakers cut and taxed their way out of a $2.8 billion budget shortfall. Sen. Joseph Zarelli, a leader of minority Republicans on budget matters, said contracts should eliminate step increases.

Dozens of unions representing 60,000 state employees bargain separately on pay, working conditions and other details of their contracts, a process that started this spring, but they come to one bargaining table to hammer out health care benefits. They met with the governor’s representatives Tuesday and will resume Aug. 24.

The state didn’t bring a counter-offer Tuesday, according to the federation’s account, but laid out various scenarios for how changes in the split of premium costs would affect workers’ out-of-pocket costs. Welch said the federation presented ideas for the state to save money without increasing premiums or out-of-pocket costs. He declined to detail those as negotiators wait for the state to respond.

A typical state government employee in an average state pays 18 percent of costs for family coverage, compared to Washington’s 12 percent, according to the National Conference of State Legislatures.

Washington employees feel like they’ve been hit too hard by layoffs, furloughs and added health care costs to have to give in on premiums.

“This is really a line in the sand issue for us,” Welch said. “When you mess around with health care, it gets state employees really mad.”

He said the average employee is paying $1,100 more in out-of-pocket costs this year due to budget cuts. A similar increase was possible for next year until the Legislature added $65 million to the general fund, driving the state’s monthly health-insurance contribution to about $863 per worker – up more than 50 percent from just two years before.

Unless state workers pay more, lawmakers will have to keep the subsidies coming. Medical costs have seen rampant inflation nationwide, Washington’s state employees have been seeking more treatment, and the insurance system for more than 330,000 state employees, retirees and dependents is in financial trouble.

Late last year, the Health Care Authority said it expected a $220 million deficit by June 2011.

State employees will have to pay more and taxpayers less, said Zarelli, R-Ridgefield, for the state to manage its $3 billion budget shortfall next year and keep its health care system solvent.

He’s not picky about whether the increases come in the form of higher monthly costs or more expensive doctor visits.

“However you structure that benefits package,” he said, “it’s got to be less than what we’re paying now.”

Contract negotiations run through Oct. 1.

The two-year contracts require approval by the Legislature before taking effect in July 2011.

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